Investor's Corner
Jefferies raises Tesla (TSLA) price target to $950 over strong demand, growing capacity
Tesla stock (NASDAQ:TSLA) recently received an optimistic outlook from Jefferies Equity Research, with analyst Philippe Houchois raising his price target on the automaker from $850 to $950 per share. Jefferies cited several reasons behind its update on TSLA stock, though the analyst noted that part of it is due to the growing gap between Tesla and legacy OEMs.
“We raise EBIT estimates 7-9% for 2022-23 and PT to $950 on higher capacity ramp and sustained demand, following further analysis of Q3 data and various sources of information on the soon-to-be-launched Berlin facility. For some time, the narrative has been legacy OEMs closing the gap; we see little evidence as Tesla continues to challenge at multiple levels. We raise EBIT and margin estimates in contrast with doubts about earnings momentum across legacy OEMs,” Houchois wrote in a note.
The Jefferies analyst noted that the demand has so far been stable for Tesla, and the company’s production capacity is getting better too. With strong demand and an ability to produce more of its products, Tesla could cater to substantially more consumers in the near future. Houchois estimated that even with a linear ramp, the addition of Giga Berlin and Giga Texas should add at least 500k units of actual capacity in one year. The analyst also noted that considering China’s recent results, concerns about domestic demand in the world’s largest EV market might be overblown.
“We make minor changes to 2021 delivery estimates (910k), calculating production exit run-rate of 1.1m, and raise 2022-23 volume to 1.3-1.7m units. Modeling a linear ramp-up of production at the low end of guided 5-10k units/week for two similarly sized new facilities in Austin and Berlin, Tesla is set to add at least 500k units of actual capacity in one year to 1.6million and a solid 200-250k of actual units in 2022.
“The final details of Q3 also showed China domestic sales of 73.6k units, putting to rest concerns about domestic demand, while annualized Q3 output yields 530k, i.e., Shanghai running at more than full capacity. Ytd Tesla delivered slightly more units than produced despite a still “immature” production network with cross-continent shipping accounting for c.20% of total production. Localizing production should improve delivery timing and associated transit costs,” Houchois wrote.
Apart from these, the Jefferies analyst noted that based on the information it could gather from Giga Berlin, the plant seems to be heavily designed for simplicity. This should make it easier for the company to produce vehicles like the Made-in-Germany Model Y in a manner that is extremely cost-efficient and relatively simple. This, together with Tesla’s capability to weather the chip shortage crisis by adapting its products to what components are available, should allow the company to keep an edge against its peers.
“From the information we could gather on the new Berlin facility, we noted that plant design was heavily flow-driven while the aluminum casting of both front and rear underbodies may reduce by c.40% the number of body-in-white components and robots required for welding and assembly. In a global auto industry plagued by complexity, Tesla continues to reduce complexity and set new standards for simplicity of design and assembly.
“Whilst Tesla has not been immune to supply disruptions in the course of 2021, it has outperformed peers in sourcing semi-conductors. From discussions with a senior expert in semi-conductor sourcing and manufacturing, we understand this partly reflects Tesla in-sourcing chip design with an ability to effect rapid re-design and secure more direct sourcing than peers,” the Jefferies analyst wrote.
Disclaimer: I own TSLA stock.
The Teslarati team would appreciate hearing from you. If you have any tips, reach out to me at maria@teslarati.com or via Twitter @Writer_01001101.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings results
Tesla’s Q4 and FY 2025 earnings come on the heels of a quarter where the company produced over 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products.
Tesla (NASDAQ:TSLA) has released its Q4 and FY 2025 earnings results in an update letter. The document was posted on the electric vehicle maker’s official Investor Relations website after markets closed today, January 28, 2025.
Tesla’s Q4 and FY 2025 earnings come on the heels of a quarter where the company produced over 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products.
For the Full Year 2025, Tesla produced 1,654,667 and delivered 1,636,129 vehicles. The company also deployed a total of 46.7 GWh worth of energy storage products.
Tesla’s Q4 and FY 2025 results
As could be seen in Tesla’s Q4 and FY 2025 Update Letter, the company posted GAAP EPS of $0.24 and non-GAAP EPS of $0.50 per share in the fourth quarter. Tesla also posted total revenues of $24.901 billion. GAAP net income is also listed at $840 million in Q4.
Analyst consensus for Q4 has Tesla earnings per share falling 38% to $0.45 with revenue declining 4% to $24.74 billion, as per estimates from FactSet. In comparison, the consensus compiled by Tesla last week forecasted $0.44 per share on sales totaling $24.49 billion.
For FY 2025, Tesla posted GAAP EPS of $1.08 and non-GAAP EPS of $1.66 per share. Tesla also posted total revenues of $94.827 billion, which include $69.526 billion from automotive and $12.771 billion from the battery storage business. GAAP net income is also listed at $3.794 billion in FY 2025.
Below is Tesla’s Q4 and FY 2025 update letter.
TSLA-Q4-2025-Update by Simon Alvarez
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla (TSLA) Q4 and FY 2025 earnings results
Tesla rolls out new Supercharging safety feature in the U.S.
